Canada raised to 21% its forecast for its drop in grain and
oilseeds production this year, including a downgrade in the barley crop to a
32-year low, citing raised expectations for crop losses to floods.

The AAFC farm ministry cut by 3.6m tonnes to 71.2m tonnes
its forecast for Canada's harvest of grains and oilseeds, from barley to
canola, this year – bucking the trend of improved hopes for crops in the
neighbouring US.

The downgrade, which puts Canada on course for a drop of
nearly 19m tonnes in production, reflected in part the acreage changes unveiled
by Statistics Canada data last month, showing a swing in area from grains to
oilseeds and pulses.

However, AAFC also hiked expectations for losses of what had
been planted, factoring in higher-than-normal rates of crop abandonment in the
key Prairie states of Manitoba and Saskatchewan.

Some 3m acres of Saskatchewan have been abandoned, and 2.5m
acres of Manitoba, according to provincial government estimates and Keystone
Agricultural Producers.

'Excessive moisture'

For wheat, the ministry slashed its harvest estimate by 1.87m
tonnes to 27.74m tonnes, a decline of 26% year on year, citing a drop of
565,000 hectares in harvested area.

AAFC estimates for Canadian crops, change on previous, (year on year)

Wheat: 27.74m tonnes, -1.87m tonnes, (-9.79m tonnes)

Canola: 14.45m tonnes, -300,000 tonnes, (-3.51m tonnes)

Corn: 11.305m tonnes, -1.07m tonnes, (-2.889m tonnes)

Barley: 7.34m tonnes, -360,000 tonnes, (-2.897m tonnes)

Soybeans: 6.10m tonnes, +400,000 tonnes, +902,000 tonnes

For barley, AAFC forecast production of 7.34m tonnes, "the
lowest since 1982," and a downgrade of 360,000 tonnes.

Production of canola, the rapeseed variant of which Canada
is the top exporter, will come in at 14.45m tonnes, a downgrade of 300,000
tonnes despite factoring in Statistics Canada's raised number for sowings.

After "excessive moisture" prevented some canola sowings,
cool and rainy conditions have provoked a "high" risk of disease and insect attacks,
the ministry said.

"Flea beetle outbreaks were extensively reported on, with
some farmers have to spray their fields several times."

Better weather

The data represent amongst the gloomy yet on Canada's crop
production, with the US Department of Agriculture, for instance, estimating the
country's wheat crop at 28.0m tonnes, and canola harvest at 15.7m tonnes.

However, they come, ironically, amid an improvement in
Canada's weather, with World Weather forecasting that the Prairies, responsible
for the great bulk of the country's crop production, "will experience a favourable
mix of rain and sunshine during the next two weeks.

"Temperatures will be seasonable," the weather service said,
adding that "further improvement in the excessive moisture situation in eastern
Canada's Prairies will occur".

Malting barley consultancy RMI Analytics - while cautioning
that "500,000 tonnes of malting barley will be severely damaged" by the heavy
rains - said that "for Saskatchewan and Manitoba, current warm temperatures, high
20s to low 30s Celsius, look set to continue".